Japan's Nikkei 225 reversed early losses on Wednesday, climbing about 0.6% to 66,271 by early afternoon in Tokyo, as a pullback in oil prices and easing US Treasury yields provided support. The advance was led by Advantest and SoftBank Group, while investors positioned cautiously ahead of Nvidia's earnings release after the US market close.
AI-linked names recover, but not uniformly
Advantest gained roughly 2.7% and SoftBank Group rose about 2.6%, together contributing more than 300 points to the Nikkei. Recruit Holdings and Sony Group also advanced over 1%, broadening the recovery beyond semiconductors. However, the move was not a blanket bet on tech: Tokyo Electron, another heavyweight chip-equipment maker, was only marginally higher after falling more than 2% earlier, and Kioxia remained down about 0.8%. This divergence suggests investors are selectively positioning ahead of Nvidia's results.
Outside the Nikkei, Terra Drone surged over 20% after Japan's Acquisition, Technology & Logistics Agency selected it to supply an interceptor drone for the Self-Defense Forces.
Lower oil and yields ease pressure
Japan, a major energy importer, benefited from a sharp drop in crude prices. Brent fell more than 2% toward $86 a barrel after Iran resumed talks with Oman over managing the Strait of Hormuz, a waterway that carried about a fifth of globally traded oil before the conflict. Lower oil reduces pressure on import costs, corporate margins, and inflation expectations, while also helping calm global bond markets.
The US 10-year Treasury yield declined about 6.5 basis points on Tuesday and hovered near 4.63%, providing another tailwind for richly valued technology shares. Nasdaq futures slipped about 0.5%, European futures were broadly flat, and MSCI's Asia-Pacific index outside Japan was little changed.
Nvidia earnings: the key test
All eyes are on Nvidia's fiscal second-quarter results, due after the US close. Consensus estimates point to revenue of about $92.2 billion and adjusted earnings of $2.09 per share, with third-quarter sales expected near $104.2 billion. Saxo's chief investment strategist, Charu Chanana, noted that simply beating forecasts may no longer satisfy investors. The critical questions are the size of any upside surprise, management's guidance on future revenue, and whether margins can withstand rising component costs.
J.P. Morgan analyst Harlan Sur told MarketWatch that Nvidia's commentary on competitiveness will also be crucial, as custom chips and emerging rivals challenge parts of its AI franchise. This matters directly for the Nikkei, as Advantest, Tokyo Electron, SoftBank, and other AI-linked names have become major index drivers. Advantest alone carried a 12.6% weight in the Nikkei at Tuesday's close, making Tokyo increasingly sensitive to Nvidia and the broader AI capital-spending cycle.
Investors are also watching how Nvidia's results might influence the recent rebound in its stock and the wider chip sector. The options market is already pricing in a potential $280 billion swing in Nvidia's market value, as noted in a recent analysis. Meanwhile, chip stocks have been volatile as investors trim exposure ahead of the report.
In Asia, South Korea's KOSPI remained volatile after an early decline, while MSCI's Asia-Pacific index outside Japan edged higher. The broader market is waiting for Nvidia's numbers to determine the next direction for AI-related equities.
This article is for informational purposes only and does not constitute financial advice.
